When you are ready to take the next step beyond buy & hold then this fun selection of advanced investing books will introduce you to the world of scientific, actuarial investment strategy - quantitative investing. This is how you produce more consistent and reliable investment returns regardless of market conditions. Each of these books offers a slightly different perspective so you can see which one is most compelling for you...
The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets
I'm not a huge fan of the "Ivy Portfolio" portion of the book. Instead, the reason this book is featured is the golden gems hidden in the 3rd section explaining quantitative systems. That is Meb's strength. Both approaches revealed in the book have held up beautifully in out-of-sample results and are fully explained in easy-to-understand terminology.
Unexpected Returns: Understanding Secular Stock Market Cycles
Investing without knowing what's in this book is like driving with your eyes closed. Ed has done the research and presents data-proven insights in beautifully organized charts that will intrigue the analytical mind and frustrate romance novel readers. Admittedly, it's not a page turner, but if you have a portfolio you gotta know this stuff. Pay particular attention to the forecast conclusions made when the book was originally published years ago.
The Misbehavior of Markets: A Fractal View of Financial Turbulence
The next time a buy & hold apologist tells you volatility doesn't matter, hand them this book. Mandlebrot is the math genius behind Fractal Geometry so this analysis comes with a serious pedigree. He analyzes security market price change distributions and proves that the frequency and severity of extreme moves defies normal statistical probability. The important conclusion is that fat-tailed distributions are so prominent that they literally define the distribution with important mathematical conclusions.
Valuing Wall Street: Protecting Wealth in Turbulent Markets
Published in 2000, this book applied Tobin's Q-ratio to call the subsequent poor stock market returns perfectly. There's tons of other research on valuation as a risk management tool (see Shiller's Irrational Exuberance
as another example), but these books are rare in providing you a well researched, fully-disclosed methodology. Use these books to better understand the roots of valuation based investment risk management.
Being Right or Making Money
This book isn't cheap, but hey, it's Ned Davis Research. What you get is a top-quality presentation of technical indicators. Of particular note is his explanation connecting quantitative investment discipline with the greatest investors of all time.
Quantitative Investment Analysis (CFA Institute Investment Series)
Let's finish this list with the textbook on quantitative analysis - literally. It is used for studying to prepare for the CFA designation.